Wall Street analysts take a fine-tooth comb to hedge fund 13F filings, watching how managers scale in and out of positions or initiate new ones. They can be a great determiner of what’s hot and what’s not, and being able to decipher which new positions a hedge fund manager is building could mean getting in at the bottom when he or she does as well. Glenview Capital’s recent 13F from September 2012 is no exception and provides five gems that the fund uncovered going into the end of the year. Continue reading for our quick take on these five equities in Glenview’s portfolio:
Beat-up retailer J.C. Penney (NYSE:JCP) took quite the stumble last year, having to watch its stock price fall almost in half. The current price of $18.79 is light years from its 52-week high of $43.18, but that is a major reason value-seekers have piled into JCP at these price points. Betting on a significant turnaround, these funds have joined Glenview Capital in hoping for a profitable transformation, but they will most likely be in for the long haul. Glenview now holds 1.8% of his $6.1bn fund in the merchandiser but will have to continue to weather the storm of negative earnings, heavy misses, and multiple downgrades. Short-term traders stay away; this play is for those willing to hold on for years to come.
Glenview’s second largest position to be initiated is the ubiquitous outdoor advertiser Lamar Advertising Company (NASDAQ:LAMR). The $4bn company had a positive 2012, garnering investors with a double-digit rate of return, but that may mean an overvalued 2013, as it is trading at the highest PEG of Glenview’s top five largest new positions. However, analysts continue to favor the company’s sprawling billboard business but are reticent about giving the stock a buy rating, rather emphasizing a focus on holding for those already invested. We mirror their convictions and feel like value is readily available elsewhere. (Read about another hedge fund manager who has more than 28% of his portfolio in Lamar.)
Which other stocks did Glenview see fit to add to their portfolio?